Carinya Cove Pty Ltd, Re v Nyholt Constructions Pty Ltd

[1998] QCA 474

COURT OF APPEAL	[1998] QCA 474
PINCUS JA THOMAS JA SHEPHERDSON J
Appeal No 3938 of 1998
IN THE MATTER OF THE CORPORATIONS LAW
and
IN THE MATTER OF CARINYA COVE PTY LTD
(ACN 064 186 090)	Appellant/Plaintiff
and
NYHOLT CONSTRUCTIONS PTY LTD
(ACN 008 538 641)	Respondent/Defendant

BRISBANE
..DATE 22/10/98
221098 T4/BP M/T COA271/98
PINCUS JA: This appeal relates to a judgment of the Supreme
Court dealing with an application to set aside two statutory
demands which can be referred to as numbers 7 and 8. Number
7 was in respect of an amount of $2,115 and number 8 in
respect to an amount of $28,232. In each instance the Judge
decided in favour of the creditor, that is, His Honour
refused to set aside the demands. The notice of appeal and
subsequent outlines raise some points which could be
described as substantial, by which I do not mean to imply
that they had any prospect of success. Shortly before the
matter came on for hearing, new counsel were engaged and Mr
Morris QC has fined the argument down to two relatively
narrow, and if I may say so, rather small points.
The first point suggested by Mr Morris is that the primary
judge should not have dismissed the application, but rather
should have set aside the demand conditionally upon the
appellant's paying the amount claimed in exchange for a bank
guarantee. The reference to exchange for a bank guarantee
does not require any elaborate explanation. In essence what
happened was that the $28,000 became payable as retention
moneys under a building contract when and if the respondent
provided the bank guarantee which it proposed to do. What
Mr Morris says in effect is that the fair thing to do was to
require the appellant to pay the money then and there and to
pay it in exchange for the guarantee. This would have been
a sensible solution, no doubt, but it was not one which was
proposed to the primary judge and it does not seem to me
that it should assist the appellant now. That is, the
judge, in my view, made no error in declining to dismiss the
221098 T4/BP M/T COA271/98
application on the basis which Mr Morris puts forward,
because that was never proposed to him by the appellant
below.
The second point is one which is rather more complex and it
is that the amount payable pursuant to the statutory demand
should be reduced by the sum of $5,000 in accordance with
certain evidence which has been discussed before us briefly
by Mr Morris and by Mr Sullivan, who appears for the
respondent.
The argument relating to the $5,000 is in essence this.
Mr Morris says that if the judge's decision stands, then
there will be or may be an issue estoppel in respect of what
I will call the $5,000 dispute. What His Honour in fact
said about it is very brief. His Honour, in his reasons,
made a finding which is at page 522 of the record, that when
the demand was issued, Carinya Cove Pty Ltd, the appellant,
was and still is indebted to Nyholt Constructions Pty Ltd,
the respondent, for the precise amount demanded. If that
stood alone, and if the findings in such a case as this were
capable of giving rise to an issue estoppel, there might be
one in respect of the $5,000 dispute. However later on on

the same page, His Honour made this reference to the $5,000:

"The applicant's material refers to an assignment of a

debt of $5,000. This point was not the subject of

argument before me and I do not take it into account."

There was some discussion in the course of Mr Morris'
argument as to whether or not the first finding is capable
of giving rise to an issue estoppel; but it seems to me
unnecessary to decide that point, because the first finding
221098 T4/BP M/T COA271/98
must be read with His Honour's reservation, if I can use
that expression, of the $5,000 point. It was not a matter
which was raised before him; he made no decision about it.
It is my opinion that the reasons read as a whole could not
possibly amount to an expression of view, even a tentative
one, as to what the fate of the $5,000 debt should be.

This conclusion makes it unnecessary for us to discuss the details of the $5,000 dispute and it is fortunate this is so, because it would really be an extraordinary course to burden the Court of Appeal with the decision, for the first time, of that point when it was not even raised by the appellant below.

The view which I take, for these reasons, is that neither of the points which have been raised by Mr Morris succeeds and the appeal should simply be dismissed with costs.

THOMAS JA: I agree. I would add that the bank guarantee
had been tendered to the appellant before the demand and had
been wrongly refused. The respondent was plainly entitled
thereafter to be paid the retention money. The demand was
valid even though imprecisely described by reference to the

superintendent's certificate.

With respect to the $5,000, I agree with what Mr Justice
Pincus has said. I note that there is some evidence that
suggests that the $5,000 which was intended to be the
subject of the assignment was based upon an alleged wrongful
deduction under a separate contract. The suggestion that
221098 T4/BP M/T COA271/98
there was an assignment of part of the debt or debts that
had been demanded was simply not litigated, and neither the
Court below nor this Court ought to find that a deduction
was required from the actual amounts of the demands.
I agree that the appeal should be dismissed with costs.

SHEPHERDSON J: I agree with the orders proposed by the learned presiding Judge and with the reasons which he has given.

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